Alcoa Can't Wait (to Flee the US)

I’d call this a semi-“Cramer’s Remorse” entry because while I am basing this off a Jim Cramer article on RealMoney.com, it’s more an expression of a company’s opinion than Cramer’s.

Specifically, the company in question is Alcoa, the giant aluminum company who is traditionally the first major company to report results for a given fiscal quarter.  The second quarter of 2009 was a relatively good quarter for Alcoa, which has been struggling mightily as of late and seen its share price fall below $10, but not for the reasons one would hope.  Specifically, Cramer reports, Alcoa’s turnaround is based on two main items: cutting jobs in the US, and expanding operations in China.

As Cramer puts it, ouch.

Whether intentionally or not, Alcoa also got a political dig in by noting that Chinese stimulus spending was far more effective than its American counterpart.  (Yeah, but, Crames, have you forgotten how it was so much more important to get stimulus done quickly rather than, well, right?)

Of course, on principle I’m dubious of the notion that stimulus spending of this kind is ideal for China, either, but given how well-kept the secrets of the Chinese government are, it’s really hard to make that judgment definitively.

But one thing seems clear — and who would have thought this just a decade ago as we all feared Hong Kong was going to be dismantled by its new Chinese ownership — the government in China has a better idea about how to promote business, than the one here in the USA.

Alcoa is the first story of the second quarter.  How many other companies will have the same story to report?